Caesars financials reflect challenging year of trading

Caesars Entertainment Corporation has reported fourth quarter and full-year 2017 results with the full year showing a net loss of $375m against increased net revenues of $4.85bn.

The growth in net revenues was attributed to the inclusion of Caesars Entertainment Operating Company which emerged from bankruptcy as of October 6, 2017. Same-store net revenues remained flat at $8.12bn.

The report also revealed that a $2bn tax benefit relating to US tax reform and CEOC's emergence from bankruptcy was offset by $2.03bn in restructuring expenses related to CEOC's emergence and a $232m loss on debt extinguishment. Adjusted EBITDAR, meanwhile, improved to $1.4bn and same-store adjusted EBITDAR of $2.20bn exceeded previously communicated expectations.

In terms of Q4 highlights net revenues increased to $1.90bn due to the inclusion of CEOC. Same-store revenues remained flat year-over-year at $1.96bn. Net income stood at $2bn, while adjusted EBITDAR improved to $491m and same-store adjusted EBITDAR of $505m exceeded forecasts.

Company President and CEO Mark Frissora noted: “For the full year, net revenues, operating income and adjusted EBITDA increased significantly year-over-year since CEOC’s results are not including 2016 and start on October 6 for the 2017 period.

“From a same-store perspective, net increase - net revenues increased one per cent year over year to $8.1bn, and $84m increase in gaming was driven by strong regional performance and steady Las Vegas slot growth. However, this was offset by unfavourable hold for a second consecutive year, which impacted our same-store revenues and income from operations by $80m and $65m respectively.”

On the outlook for 2018, CFO Eric Hession stated: “We believe the Las Vegas market will continue to generate positive results in the long term. We expect the strip to continue trending towards becoming the top meeting and convention destination location in the country, with the expansion of space at the Las Vegas Convention Centre, at our properties and at other properties along the strip.

“The continued strength in the group segment heightened - highlighted activity around professional sports, and stable room supply environment on the strip are all catalysts for the continued organic growth of our Las Vegas properties.

“In addition, high consumer confidence supported growth in many of our regions through the back half of 2017, and we expect the trend to continue, provided that favourable macros persist. Recent tax reform should further support this trend. However, we do expect to face some challenges in 2018. We believe the introduction of new competition in some of the regional markets, particularly in Atlantic City, will negatively impact our results in the second half of the year.”

Totally Gaming says: Evidently 2017 has not been without its problems for Caesars thanks to issues such as an unfavourable hold for a second year running and restructuring expenses. The shooting tragedy of October 1 in Vegas also took its toll on earnings. But looking ahead, the operator has several initiatives in the pipeline and continues to actively seek out new market opportunities, notably Brazil where its representatives have recently met with government to sketch out a new investment project.